Blockbuster video faces Chapter 11 bankruptcy

Embattled Blockbuster Inc., the video rental giant that recently said it will close 500 more stores, faces Chapter 11 bankruptcy if it fails to restructure $957 million in debt. The company's stock lost a third of its value to close at 12 cents a share Wednesday after an SEC filing disclosed slumping business conditions "raise substantial doubt about our ability to continue as a going concern." Blockbuster, which has 337 stores left in Florida and about 45 in the Tampa Bay area, is negotiating a debt-for-stock swap with lenders, mapping plans to cut costs another $200 million and proposing to put its Canadian operation up as collateral for lower DVD prices from Hollywood studios. Blockbuster, which has 4,018 stores across the country, lost $558 million in 2009 when revenues plunged 20 percent to $4 billion.